SECOND DIVISION

[G.R. No. L-48359. March 30, 1993.]

MANOLO P. CERNA, Petitioner, v. THE HONORABLE COURT OF APPEALS and CONRAD C.
LEVISTE, Respondents.
Zosa & Quijano Law Offices for Petitioner.
Benjamin H. Aquino for Private Respondent.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS & CONTRACTS; SOLIDARY LIABILITY, NOT PRESUMED. Only Delgado signed
the promissory note and accordingly, he was the only one bound by the contract of loan. Nowhere did it
appear in the promissory note that petitioner was a co-debtor. The law is clear that" (c)ontracts take effect
only between the parties . . ." But by some stretch of the imagination, petitioner was held solidarily liable for
the debt allegedly because he was a co-mortgagor of the principal debtor, Delgado. This ignores the basic
precept that" (t)here is solidarily liability only when the obligation expressly so states, or when the law or
the nature of the obligation requires solidarity." The contract of loan, as evidenced by the promissory note,
was signed by Delgado only. Petitioner had no part in the said contract. Thus, nowhere could it be seen from
the agreement that petitioner was solidarily bound with Delgado for the payment of the loan.
2. ID.; ID.; SIGNATORY TO THE PRINCIPAL CONTRACT OF LOAN, PRIMARILY LIABLE; THIRD-PARTY
MORTGAGOR NOT SOLIDARILY BOUND WITH THE PRINCIPAL DEBTOR. There is no legal provision nor
jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of anothers
obligation by mortgaging his own property to be solidarily bound with the principal obligor. A chattel
mortgage may be "an accessory contract" to a contract of loan, but that fact alone does not make a thirdparty mortgagor solidarily bound with the principal debtor in fulfilling the principal obligation that is, to pay
the loan. The signatory to the principal contract loan remains to be primarily bound. It is only upon the
default of the latter that the creditor may have been recourse on the mortgagors by foreclosing the
mortgaged properties in lieu of an action for the recovery of the amount of the loan. And the liability of the
third-party mortgagors extends only to the property mortgaged. Should there be any deficiency, the
creditors has recourse on the principal debtor.
3. ID.; ID.; ID.; A SPECIAL POWER OF ATTORNEY AUTHORIZING THE MORTGAGE OF CERTAIN PROPERTIES
DID NOT MAKE THE ATTORNEY-IN-FACT A MORTGAGOR. The mortgage contract was also signed only by
Delgado as mortgagor. The Special Power of Attorney did not make petitioner a mortgagor. All it did was to
authorized Delgado to mortgage certain properties belonging to petitioner. And this is in compliance with the
requirement in Article 2085 of the Civil Code which states that: "Art. 2085. The following requisites are
essential to the contracts of pledge and mortgage: (3) That the persons constituting the pledge or mortgage
have the free disposal of their property, and in the absence thereof, that they be legally authorized for the
purpose." In effect, petitioner lent his car to Delgado so that the latter may mortgage the same to secure his
debt. Thus, from the contract itself, it was clear that only Delgado was the mortgagor regardless of the fact
the he used properties belonging to a third person to secure his debt.
4. REMEDIAL LAW; CIVIL ACTIONS; FILING OF COLLECTION SUIT BARRED THE FORECLOSURE OF
MORTGAGE. We agree with petitioner that the filing of collection suit barred the foreclosure of the
mortgage. Thus: "A mortgage who files a suit for collection abandons the remedy of foreclosure of the
chattel mortgage constituted over the personal property as security for the debt or value of the promissory
note which he seeks to recover in the said collection suit." The reason for this rule is that: ". . . when,
however, the mortgage elects to file a suit for collection, not foreclosure, thereby abandoning the chattel as
basis for relief, he clearly manifest his lack of desire and interest to go after the mortgaged property as
security for the promissory note . . ."
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5. ID.; MORTGAGE DEBT DUE FROM ESTATE; OPTIONS GIVEN TO CREDITORS UNDER SEC. 7, RULE 86,
NEW RULES OF COURT. Leviste, having chosen to file the collection suit, could not now run after petitioner
for the satisfaction of the debt. This is even more true in this case because of the death of the principal
debtor, Delgado. Leviste was pursuing a money claim against a deceased person. Section 7, Rule 86 of the
Rules of Court provides: "Sec. 7. Mortgage debt due from estate. A creditor holding a claim against the

deceased secured by mortgaged or other collateral security, may abandon the security and prosecute his
claim in the manner provided in this rule, and share in the general distribution of the assets of the estate; or
he may foreclose his mortgage or realize upon his security, by action in court, making the executor or
administrator a party defendant, and if there is a judgment for a deficiency, after the sale of the mortgaged
premises, or the property pledged, in the foreclosure or the other proceeding to realize upon security, he
may claim his deficiency judgment in the manner provided in the preceding section; or he may upon his
mortgage or other security alone, and foreclosure the same at any time within the period of the statue of
limitations, and in that event he shall not be admitted as a creditor, and shall receive no share in the
distribution of the other assets of the estate; . . ."

DECISION

CAMPOS, JR., J.:

Before us is a Petition for Review on Certiorari of the decision ** of the Court of Appeals in CA G.R. No. SP07237, dated March 31, 1978.
The facts of this case are as follows:

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On or about October 16, 1972, Celerino Delgado (Delgado) and Conrad Leviste (Leviste) entered into a loan
agreement which was evidenced by a promissory note worded as follows:
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"FOR VALUE RECEIVED, I, CELERINO DELGADO, with postal address at 98 K-11 St., Kamias Rd., Quezon
City, promise to pay to the order of CONRAD C. LEVISTE, NINETY (90) DAYS after date, at his office at 215
Buendia Ave., Makati Rizal, then total sum of SEVENTEEN THOUSAND FIVE HUNDRED (P17,500.00) PESOS,
Philippine Currency without necessity of demand, with interest at the rate of TWELVE (12%) PERCENT per
annum;" 1
On the same date, Delgado executed a chattel mortgage 2 over a Willys jeep owned by him. And acting as
the attorney-in-fact of herein petitioner, Manolo P. Cerna (petitioner), he also mortgage a "Taunus car
owned by the latter.
The period lapsed without Delgado paying the loan. This prompted Leviste to a file a collection suit docketed
as Civil Case No. 17507 3 with the Court of First Instance of Rizal, Branch XXII against Delgado and
petitioner as solidary debtors. Herein petitioner filed his first Motion to Dismiss 4 on April 4, 1973. The
grounds cited in the Motion were lank of cause of action against petitioner and the death of Delgado. Anent
the latter, petitioner claimed that the claim should be filed in the proceedings for the settlement of Delgados
estate as the action did not survive Delgados death. Moreover, he also stated that since Leviste already
opted to collect on the note, he could no longer foreclose the mortgage. This Motion to Dismiss was denied
on August 15, 1973 by Judge Nicanor S. Sison. Thereafter, petitioner filed with the Court of Appeals a
special civil action for certiorari, mandamus, and prohibition with preliminary injunction docketed as CA G.R.
No. 03088 on the ground that the respondent judge committed grave abuse of discretion in refusing to
dismiss the complaint. On June 28, 1976, the Court of Appeals 5 denied the petition because herein
petitioner failed to prove the death of Delgado and the consequent settlement proceedings regarding the
latters estate. Neither did petitioner adequately prove his claim that the special power of attorney in favor
of Delgado was forged.
On February 18, 1977, petitioner filed his second Motion to Dismiss on the ground that the trial court, now
presided by Judge Nelly L. Romero Valdellon, acquired no jurisdiction over deceased defendant, that the
claim did not survive, and that there was no cause of action against him. On May 13, 1977, the said judge
dismissed the motion in an order hereunder quoted, to wit:
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"Considering the second motion to dismiss filed by respondent Manolo Cerna on March 4, 1977, as well as
plaintiffs opposition thereto reiteration of the same grounds raised in the first motion to dismiss dated April
4, 1973, this Court hereby reiterates its resolution found in its order dated August 15, 1973." 6
Petitioner filed a motion to reconsider the said order but this was denied. Then, on October 17, 1977, he
filed another petition for certiorari and prohibition docketed as CA G.R. No. SP-07237 with the Court of

Appeals. This petition was dismissed by the said court in a decision which stated, thus:

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"WHEREFORE, the herein petition insofar as it alleges lack of cause of action on the part of the herein
petitioner is concerned, is hereby dismissed and/or denied and the writ of preliminary injunction previously
issued by this Court is hereby lifted and/or set aside; insofar, however, as the case against the deceased
Celerino Delgado is concerned, the petition is granted, that is, the complaint in the lower court against
Celerino Delgado should be dismissed. No costs." 7
Thereafter, the instant petition for review was filed. Petitioner raised the following legal issue:

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". . . NOW, INASMUCH AS THE COMPLAINT IS ONLY FOR COLLECTION OF A SUM OF MONEY BASED ON THE
PROMISSORY NOTE, SHOULD NOT THE COMPLAINANT BE DISMISSED FOR LACK OF CAUSE OF ACTION AS
AGAINST MANOLO P. CERNA WHO IS NOT A DEBTOR UNDER THE PROMISSORY NOTE CONSIDERING
THAT ACCORDING TO SETTLED JURISPRUDENCE THE FILING OF A COLLECTION SUIT IS DEEMED AN
ABANDONMENT OF THE SECURITY OF THE CHATTEL MORTGAGE?" 8
In holding petitioner liable, the Court of Appeals held that petitioner and Delgado were solidary debtors.
Thus, it held:
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"But the herein petitioner pleads that the complaint states no cause of actions against the defendants
Manolo P. Cerna on the following grounds: 1) that the petitioner did not sign as joint obligator in the
promissory note signed by the deceased Celerino Delgado hence, even if the allegations of the complaint are
hypothetically admitted there is no cause of action against the herein petitioner because having proceeded
against the promissory note he is deemed to have abandoned the foreclosure of the chattel mortgage
contract. This contention deserves scant consideration. The chattel mortgage contract, prima facie shows
that it created the joint and solidary obligation of petitioner and Celerino Delgado against
private Respondent." 9 (Emphasis ours)
We do not agree. Only Delgado signed the promissory note and accordingly, he was the only one bound by
the contract of loan. Nowhere did it appear in the promissory note that petitioner was a co-debtor. The law is
clear that" (c)ontracts take effect only between the parties . . ." 10
But by some stretch of the imagination, petitioner was held solidarily liable for the debt allegedly because he
was a co-mortgagor of the principal debtor, Delgado. This ignores the basic precept that" (t)here is solidarily
liability only when the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity." 11
We have already stated that the contract of loan, as evidenced by the promissory note, was signed by
Delgado only. Petitioner had no part in the said contract. Thus, nowhere could it be seen from the
agreement that petitioner was solidarily bound with Delgado for the payment of the loan.
There is also no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures
the fulfillment of anothers obligation by mortgaging his own property to be solidarily bound with the
principal obligor. A chattel mortgage may be "an accessory contract" 12 to a contract of loan, but that fact
alone does not make a third-party mortgagor solidarily bound with the principal debtor in fulfilling the
principal obligation that is, to pay the loan. The signatory to the principal contract loan remains to be
primarily bound. It is only upon the default of the latter that the creditor may have been recourse on the
mortgagors by foreclosing the mortgaged properties in lieu of an action for the recovery of the amount of
the loan. And the liability of the third-party mortgagors extends only to the property mortgaged. Should
there be any deficiency, the creditors has recourse on the principal debtor.
In this case, however, the mortgage contract was also signed only by Delgado as mortgagor. It is true that
the contract stated the following:
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"That this CHATTEL MORTGAGE, made and entered into this 16th day of October, 1972 at Makati, Rizal, by
and between:
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CELERINO DELGADO, . . . as Attorney-in -Fact of Manolo P. Cerna . . . by virtue of a Special Power of

Attorney executed by said Manolo P. Cerna in my favor under the date of October 10, 1972 and
acknowledged before Orlando J. Coruna . . . herein referred to as the MORTGAGOR; - and CONRAD C. LEVISTE, . . . hereinafter referred to as the MORTGAGEE." 13

But this alone does not make petitioner a co-mortgagor especially so since only Delgado singed the chattel
mortgage as mortgagor. The Special Power of Attorney did not make petitioner a mortgagor. All it did was to
authorized Delgado to mortgage certain properties belonging to petitioner. And this is in compliance with the
requirement in Article 2085 of the Civil Code which states that:
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"Art. 2085. The following requisites are essential to the contracts of pledge and mortgage:
x

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(3) That the persons constituting the pledge or mortgage have the free disposal of their property, and in the
absence thereof, that they be legally authorized for the purpose." (Emphasis ours.)
In effect, petitioner lent his car to Delgado so that the latter may mortgage the same to secure his debt.
Thus, from the contract itself, it was clear that only Delgado was the mortgagor regardless of the fact the he
used properties belonging to a third person to secure his debt.
Granting, however, that petitioner was obligated under the mortgage contract to answer for Delgados
indebtedness, under the circumstances, petitioner could not be held liable because the complaint was for
recovery of a sum of money, and not for the foreclosure of the security. We agree with petitioner that the
filing of collection suit barred the foreclosure of the mortgage. Thus:
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"A mortgage who files a suit for collection abandons the remedy of foreclosure of the chattel mortgage
constituted over the personal property as security for the debt or value of the promissory note which he
seeks to recover in the said collection suit." 14
The reason for this rule is that:

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". . . when, however, the mortgage elects to file a suit for collection, not foreclosure, thereby abandoning the
chattel as basis for relief, he clearly manifest his lack of desire and interest to go after the mortgaged
property as security for the promissory note . . ." 15
Hence, Leviste, having chosen to file the collection suit, could not now run after petitioner for the
satisfaction of the debt. This is even more true in this case because of the death of the principal debtor,
Delgado. Leviste was pursuing a money claim against a deceased person. Section 7, Rule 86 of the Rules of
Court Provides:
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"Sec. 7. Mortgage debt due from estate. A creditor holding a claim against the deceased secured by
mortgaged or other collateral security, may abandon the security and prosecute his claim in the manner
provided in this rule, and share in the general distribution of the assets of the estate; or he may foreclose
his mortgage or realize upon his security, by action in court, making the executor or administrator a party
defendant, and if there is a judgment for a deficiency, after the sale of the mortgaged premises, or the
property pledged, in the foreclosure or the other proceeding to realize upon security, he may claim his
deficiency judgment in the manner provided in the preceding section; or he may upon his mortgage or other
security alone, and foreclosure the same at any time within the period of the statue of limitations, and in
that event he shall not be admitted as a creditor, and shall receive no share in the distribution of the other
assets of the estate; . . ."
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The above-quoted provision is substantially similar to Section 708 of the Code of Civil Procedure which
states:
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"Sec. 708. A creditor holding against the deceased, secured by mortgage or other collateral security, may
abandon the security and prosecute his claim before the committee, and share in the mortgage or realize
upon his security, by ordinary action in court, making the executor or administrator a party defendant; . . ."

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virtua1aw library

The Supreme Court, in the case of Osorio v. San Agustin, 16 has made the following interpretation of the
said provision,, to wit:
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"It is clear by the provisions quoted section that a person holding a mortgage against the estate of a
deceased person may abandon such security and prosecute his claim before the committee, and share in the
distribution of the general assets of the estate. It provides also that he may, at his own election, foreclose

the mortgage and realize upon his security. But the law does not provide that he may have both remedies. If
he elects one he must abandon the other. If he fails in one he fails utterly."
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But while there is a merit in the substantial allegations of this petition, We are constrained to deny the
petition on procedural grounds. The facts of this case reveal that the decision under review in the decision in
the second certiorari and prohibition case lodged petitioner against the judge trying the civil case. It
appeared that after the denial of the first motion to dismiss, petitioner filed CA-G.R. No. 03088 wherein
petitioner alleged grave abuse of discretion on the part of Judge Sison. The first petition was denied by the
Court of Appeals. The decision became final. The second motion to dismiss, based on the same grounds, was
thereafter filed. It was likewise denied and another petition for certiorari and prohibition was again
instituted. The decision in the latter case is now under review.
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We agree with the contention of private respondent, that the action has been barred by the principle of res
judicata.
It appears in this case that the second motion was filed to circumvent the effects of the finality of the
decision of the Court of Appeals in Ca-G.R. No. 03088. Petitioner intended the second motion and the
subsequent proceedings as remedies for his lapsed appeal. We cannot such behavior. It delayed the
proceedings in this case and unduly burdened the courts. Petitioner should have allowed the trial of the case
to go on where his defenses could still be presented and heard.
WHEREFORE, in view of the forgoing,, the Petition is hereby DISMISSED. With costs.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Nocon, JJ., concur.